The Victorian Civil and Administrative Appeals Tribunal overturned a ruling on Tuesday which had allowed organisers of “Lesfest” to be exempt of equal opportunities laws and allow only “female-born” lesbians to attend or work at the festival.
The original complaint of the exemption came from a transsexual lobby group, the Australian WOMAN Network.
Co-convenor of the group, Karen Gurney, said the exemption had caused “distress” among its members since it failed to recognise transsexuals as medically and legally women.
But Lesfest spokeswoman, Anna Holland-Moore, says there is a difference between lesbians brought up female, and those brought up male.
"It's not about excluding, it's about affirmation of our identity," said Holland-Moore. "We just wanted a week together to consolidate our culture and discuss relevant issues."
The exemption would have also allowed the group to ban boys over eight and non-lesbian girls over 15.
Lesfest has not decided whether or not it will reapply for an exemption or send out private invitations to the event instead.
The festival is due to be held in bushland in January at Daylesford in Victoria state.